Shares trump property as top asset

Johannesburg - In the past the majority of household assets were in residential property, but the composition of the household balance sheet on the asset side has shifted, according to an expert.

“The biggest portion of assets that most households owned was in residential property, but what we are now seeing is that this has decreased,” said Professor Bernadene de Clerq at the personal finance research unit at Unisa.

She said many more households now own financial instruments and assets like a cash account or a savings account or stocks.

“We might not think that a lot of households own stocks or shares on the JSE, but via their pension funds, that is where the majority of household assets are.

“For those consumers who do save and are members of a pension fund, they have had great returns in the last few years, increasing their wealth,” De Clerq said.

She said that it is important from a policy debate to understand this composition.

De Clerq said more must be done to invest in financial assets like social security reform to change the lives of people and increase their wealth.

“We must ensure more people have access to a pension fund, regardless of the format. The social security reform needs to be introduced as soon as possible,” she urged.

“It’s important also for consumers when they are not part of a pension fund to look at the opportunities of investing in retirement annuities because that gives them access to the JSE.”

De Clerq added that it also helps saving for the long term, because asset composition is key for creating long-term wealth for consumers.